Deal Insight

Freeport McMoRan acquires Plains for US$17 billion

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05 December 2012

Freeport McMoRan acquires Plains for US$17 billion

Report summary

Freeport-McMoRan Copper & Gold Inc. (FCX) is to acquire Plains E&P for a total of US$17.2 billion (including debt). In a separate transaction announced on the same day, FCX acquired McMoRan Exploration in a deal that valued the company at US$3.4 billion. This note concerns only the former transaction.Our base-case valuation of the Plains acquisition is US$13.7 billion (NPV10, discounted to January 2013). Against our modelling, the consideration equates to an Implied Long-Term Oil ...

Table of contents

  • Executive summary
  • Transaction details
    • Onshore US
    • Deepwater Gulf of Mexico
    • McMoRan Exploration
  • Deal analysis
    • Onshore upsides
    • Deepwater upsides
    • Investment high-grading
    • Operational learning curve
    • Plains
    • Freeport-McMoRan
      • Geographic diversification
      • Commodity diversification
      • Big is beautiful
  • Oil & gas pricing and assumptions

Tables and charts

This report includes 8 images and tables including:

  • PXP acquisition details
  • Plains reported historic and Wood Mackenzie forecast total production, including upside potential
  • Deal analysis: Table 1
  • Deal analysis: Table 2
  • Oil & gas pricing and assumptions: Table 1
  • Oil & gas pricing and assumptions: Table 2
  • Upstream assets: Table 1
  • WoodMac forecast of Plains net debt cash position and free cash flow outlook sensitivities

What's included

This report contains:

  • Document

    Freeport McMoRan acquires Plains for US$17 billion

    PDF 1.10 MB